Q&A: PBM Reform, Other Policy Considerations to Combat Pharmacy Deserts

Many pharmacy industry advocates have been vocalizing their concerns regarding pharmacy benefit managers (PBMs) and their struggles in keeping pharmacy businesses sustainable. While PBM reform is the target of many pharmacists and independent store owners, experts also have concerns with how to revert the course pharmacy storefronts are headed down.

“Something else that I think that we really need to be encouraging our policymakers to think about is when a community pharmacy closes, especially in a rural or underserved area, what is the incentive for another pharmacy to open in that area,” Michael Murphy, PharmD, MBA, assistant professor of clinical pharmacy at The Ohio State University College of Pharmacy, told Drug Topics. “If there [aren’t] additional incentives, there's concern that that community may just become a pharmacy desert forever.”

Murphy caught up with Drug Topics to talk PBM reform and other potential policies that could significantly impact the growing issue of pharmacy deserts. | image credit: Hariyanto Bromantio / stock.adobe.com

Murphy, who is also an advisor for state government affairs with the American Pharmacists Association, has been researching the issue of pharmacy deserts and has even teamed up with other pharmacy experts to provide potential solutions.

Despite a majority of federal legislation failing to impact the state of pharmacy businesses in the US, Murphy believes actions like PBM reform, expansion of pharmacists’ scopes, and programs to boost pharmacies in the US are necessary to communities across the country. Read on to learn more about Murphy’s solutions to redirect the path that the pharmacy industry is headed toward.

READ MORE: Q&A: Pharmacy Desert Improvement Reliant on Industry Advocacy, Reform

Drug Topics: Many experts believe that PBM reform could be a major catalyst in correcting the trajectory of pharmacy deserts. Do you agree with this sentiment, or do you believe that other concerted efforts are needed to improve pharmacy sustainability?

Michael Murphy: I think it's important for us, whenever we see a problem or a disease, we’ve got to diagnose what's causing this problem or this disease. The reason that we're seeing pharmacies close across the country is because there is a business failure in community pharmacy that's not the community pharmacy’s fault. It is because we've seen, over the past several years, a significant decline in pharmacies being able to generate revenue when they dispense medications to their patients. Commonly, when pharmacies dispense medications, they're paid by pharmacy benefit managers, who are subcontractors of your health insurance plan. They're paid for both the medication and also for their professional service to review the safety and effectiveness of the medication; to make sure it's safe for you to take.

What we've seen over the past several years is that for both the medications and for that professional service, pharmacy benefit managers have not been paying pharmacies oftentimes at a rate that they can break even, let alone make a profit. If you're dispensing a prescription to a patient and you're taking a loss, you can only do that so many times before your business fails. That's the exact situation that we're seeing across the country. From large chain pharmacies that are filing for bankruptcy and are closing across the country, to small independents, we're seeing this business failure propagate across the country, and that's really the big reason.

We need our state and federal policymakers to enact pharmacy benefit manager reform policies to ensure that pharmacies are being paid at minimum what they need in order to sustain their businesses. Otherwise, the unfortunate situation is we're going to continue to see pharmacies close and patient outcomes are going to suffer. Policymakers, constituents are going to suffer if they don't take action. We need both state and federal policymakers to act in order to rectify the concerning situation that we're seeing across the country.

There are other policies to consider, though, as well. Pharmacists provide a lot of additional services to patients, like providing immunizations, test-and-treat services, and in some states, pharmacists can prescribe for a variety of medications, like hormonal contraceptives, HIV pre-exposure prophylaxis, or post-exposure prophylaxis. But oftentimes health insurance plans don't recognize those services as a reimbursable service provided by the pharmacist. We also need policymakers at the state and federal level to pass legislation that recognizes pharmacists as providers and allows for the reimbursement of those services, so that pharmacists can provide services to those patients, and patients are allowed to use their health insurance to receive those services as a covered benefit. We’ve got to focus on both sides of the equation to make sure that we keep those pharmacy doors open, and when patients want to receive additional patient-care services by their pharmacist, that they can receive those services and use their insurance too.

Drug Topics: In your article on the growing crisis of pharmacy deserts, you presented multiple policy considerations to improve the issue. Can you touch on the potential policies or solutions that you think could have the most significant impact?

Michael Murphy: I think that we already hit on 2 of the big components of it, which is PBM reform but also ensuring that patients are allowed to use their health insurance to receive care provided by pharmacists. Something else that I think that we really need to be encouraging our policymakers to think about is when a community pharmacy closes, especially in a rural or underserved area, what is the incentive for another pharmacy to open in that area? If there [aren’t] additional incentives, there's concern that that community may just become a pharmacy desert forever.

One of the policies that we encourage in our article—Jen Rodis, PharmD, FAPhA, and I from Ohio State University—is for policymakers to think about, how are we incentivizing the behaviors that we want to see out in the business community? If we see concern with having more pharmacy deserts in specific locations, how can we incentivize more pharmacies to open in those areas? That could be accomplished [in] a variety of ways. That could be done through state-sponsored grants to encourage and help support the opening of businesses in those locations. It could also come knowing that many of those areas may have higher Medicaid populations. Are there opportunities to potentially leverage supplemental dispensing fees for Medicaid beneficiaries, so that when pharmacies are providing care and medications to underserved, vulnerable members of our community, there's more of an incentive for them to open in those areas where there's higher numbers of Medicaid beneficiaries.

There's lots of different ways that you can try to pull the levers to try to showcase that there's a financial incentive there. But that's one thing that we need to be thinking about, in addition to things like PBM reform and payment for pharmacist services, to ensure that we are seeing pharmacies reopen in those locations where we're seeing these pharmacy deserts spread across the country right now.

READ MORE: Debates on Pharmacy Desert Definition Impact Access to Care

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Reference

Murphy M, Rodis J. The growing crisis of pharmacy deserts. The Ohio State University College of Pharmacy. April 28, 2025. Accessed July 28, 2025. https://pharmacy.osu.edu/news/growing-crisis-pharmacy-deserts